After a loss, many families are faced with tough choices about funeral services, arrangements, and expenses—often while still reeling from grief. It’s a time when emotions are high and financial decisions can feel overwhelming.

Final expense planning can help relieve your loved ones of this burden by ensuring your final arrangements are fully planned and funded. “Talking about our own funeral and burial or cremation can be uncomfortable, of course,” said Josh Hodges, NCOA's Chief Customer Officer. “But taking time now to organize your affairs brings added reassurance—not only for your family, but for you.”

What is final expense planning?

Final expense planning is the process of making arrangements in advance and setting aside funds to cover end-of-life costs like funeral, burial, or cremation expenses.

Why is final expense planning so critical? “Funeral and burial costs can add up quickly, and families end up dipping into their own savings,” Hodges further explained.

“They may even use credit cards or take out high-interest loans to cover these expenses. Planning ahead removes that burden. It allows your family to focus on celebrating your life and finding comfort in each other. And it protects their finances,” Hodges said.

By budgeting for your end-of-life arrangements now, you can prevent unnecessary debt, protect shared assets, and ensure your final farewell is carried out the way you envision it.

How much should I budget for a funeral?

One of the first questions people have about end-of-life planning is: How much will it cost?

According to a 2023 study by the National Funeral Directors Association, here are some national cost averages to keep in mind:

• Traditional funeral with viewing and burial: $8,300
• Cremation with a funeral service: $6,280
• Direct cremation with urn (no service): $3,585

Keep in mind that extras like flowers, obituary notices, cemetery plots, transportation, and headstones can add several thousand dollars more to total expenses.

Costs vary widely based on location, whether you opt for burial versus cremation, and the type of service you choose. Inflation also continues to drive prices skyward each year. What costs $8,000 today could easily be $10,000 or more in a decade.

That’s why it’s wise to review your finances and budget and set a realistic goal for what you can afford. Whether you prefer a modest gathering of close friends and family or a full-fledged ceremony, understanding these numbers helps you plan ahead and avoid straining your family financially.

What is the best way to pay for your funeral? 5 options

There’s no single “right” way to fund your final expenses; it depends on your finances, preferences, and how much control you want to maintain. Here are some of the most common options:

1. Payable-on-death (POD) account. A POD account (also known as a transfer-on-death account) is a simple bank account with a designated beneficiary. Checking and savings accounts, money market accounts, and certificates of deposit (CDs) all qualify to be POD accounts. Upon your passing, the funds transfer directly to that person without going through probate.

• Pros: These accounts are easy to set up and the funds transfer quickly.
• Cons: You’ll need to review the amount periodically. If costs rise, your account might not cover everything.

2. Prepaid funeral plans. Some people choose to pay a funeral home directly in advance. This is called a prepaid funeral plan, and it can be customized according to your budget and your wishes.

• Pros: A prepaid plan locks in today’s prices and relieves your family from making stressful decisions during their time of grief.
• Cons: It’s less flexible if you move or change your mind, and there’s a risk if the funeral home goes out of business.

3. Life insurance policies (including burial or final expense insurance)

A life insurance policy includes a death benefit that can help cover final costs after you die. The payout amount is usually the policy’s face value, which you selected when you first enrolled. Depending on your coverage, it could range from a few thousand dollars to several million.

• Pros: Life insurance proceeds are intended to provide broad financial support, helping to cover not only funeral costs, but also outstanding debts and everyday living expenses.
• Cons: Premiums and eligibility can vary based on your age and health, so it’s important to compare policies carefully before choosing one.

There are two main types of life insurance policies to consider:

• Term life insurance offers coverage for a fixed number of years, often at a lower cost.
• Whole life insurance provides lifelong coverage and can build cash value over time. Final expense insurance (sometimes called burial insurance) typically refers to a smaller whole life policy designed to help pay for funeral and burial costs.

4. Funeral trusts

A funeral trust, or burial trust, includes funds set aside solely for funeral expenses like a casket, embalming, cemetery plot, and venue for funeral service. These trusts can be irrevocable (assets are locked in) or revocable (you retain control of your assets).

• Pros: These funds are legally protected for that purpose and may also help with Medicaid eligibility (irrevocable trusts only).
• Cons: If you purchase a trust from a private funeral home that then goes bankrupt, your funds may be permanently lost.

5. Government benefits

While these won’t cover everything, a few programs can help offset your end-of-life costs:

• Social Security: Provides a one-time death payment of $255 to a surviving spouse or child.
• Veterans benefits: These may include burial allowances, a plot in a national cemetery, and a government-provided headstone or marker.
• State/local programs: Some states offer small burial assistance programs for low-income residents. Contact your local department of social services to find out what’s available in your area.

How can I minimize funeral expenses?

It’s perfectly possible plan a meaningful farewell without overspending. Here are a few smart ways to keep funeral costs in check:

• Shop around: Don’t feel compelled to use the local funeral home all your friends and neighbors use. Check and compare the pricing of establishments all across your region. They are legally required to provide itemized price lists, so you know exactly what to expect.
• Consider direct cremation: It’s often less expensive than burial and offers flexibility for memorial services. Bonus: You don’t have to use a funeral home where you live, since cremains can be shipped from anywhere.
• Eliminate embalming: Embalming is not a legal requirement in most states when cremation or burial is scheduled within 48 hours. In these cases, refrigeration is a practical alternative.
• Skip the vault: Most cemeteries require a burial vault, but they are not required by law. If you prefer not to use one, look for a cemetery that allows vault-free burials—such as a green or natural burial ground.
• Look online for a casket: Don’t feel pressured into buying a top-of-the-line casket directly from the funeral home. You can find caskets online for a fraction of the retail price. This includes less expensive varieties such as those made of wood veneer or sturdy cardboard. 
• Limit extras: Deluxe fresh floral bouquets and printed programs can quickly drive up the costs of final arrangements. Instead, focus on what’s most meaningful to you and your loved ones.
• Communicate your wishes: One of the biggest sources of overspending comes from family members making hasty decisions under stress. Final expense planning helps prevent this by making your preferences clear up front.

Final expense planning checklist

When you’re ready to begin, here’s a simple checklist to guide you:

1. Calculate your final expenses. These may include a funeral, burial or cremation, memorial services, and extras.
2. Decide how to cover these expenses through a prepaid funeral plan, a funeral trust, life insurance, or savings.
3. Take the time to compare providers and prices. Don’t hesitate to ask questions and request written estimates.
4. Talk openly with your family—when you share your wishes ahead of time, they won’t be left wondering and guessing.
5. Put it in writing and include your plans with your will or estate documents.
6. Review your plan every few years. This allows you to modify your arrangements or adjust for any changes in your financial situation.

Even if you can only take one or two steps on this list now, that’s progress. You don’t have to finalize everything at once.

Make final expense planning a priority today

No one likes to contemplate their end-of-life costs, but waiting means someone else may have to make those choices for you.

Just like writing a will or choosing beneficiaries, final expense planning is an integral part of estate planning—and an act of love. It helps prevent added chaos and confusion during a tough time and shields your family from financial stress. Just as importantly, it helps ensure your life is honored just the way you want.